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Saturday, October 3, 2015

Richard Rahn from the Cato institute: A Nation Worth Emulating

Zurich, Switzerland — When you think of Switzerland what
comes to mind? Beautiful lakes surrounded by the Alps; a rich country with
happy people; the home of milk chocolate, expensive watches and discrete
bankers; a peaceful country that has not been at war in more than two
centuries?

All that is true, and even more. Switzerland is at or near the top
of almost every measure of a successful country, including the just released
Human Freedom Index complied by the Cato and Fraser Institutes, and others.

The prosperous and peaceful country of Switzerland is, in
fact, rather recent in origin. The high level of prosperity has only really
existed since the end of World War II. The current constitution that created
the existing federal state was adopted in 1848, revised in 1874, and modernized
and cleaned up in 1999. The 1848 constitution was modeled after the U.S.
Constitution, which was adopted 60 years earlier. The Swiss, much more so than
the Americans, have stuck with the federal model of strong local and state
(cantons) government with a small and rather weak central government. In many
ways, it is much truer to the type of government envisioned by Jefferson and
Madison and many of the other American Founders — which is responsible for much
of Switzerland’s success.

I first started visiting and writing about Switzerland on a
regular basis more than 30 years ago. Having been an adviser to leaders in a
number of countries, I found it more productive to argue that they should
follow successful role models rather than a particular economic and governance
theory. Of course, the highly successful role models, like Switzerland, all
have the rule of law, protection of private property, and a high degree of
economic freedom.

A hundred-and fifty-years ago, Switzerland, despite being
the first European country after England to industrialize, had many poor people
who were emigrating to the United States and elsewhere. The Swiss trace their
origin as a nation back to 1291 when three cantons in central Switzerland
united for common defense. During the next 500 years, other contiguous pieces
of the old Holy Roman Empire joined in a loose confederation. In was only in
1648 with the Treaty of Westphalia that the other European nations recognized
Switzerland as an independent country.

Over the centuries, the Swiss engaged in many internal
battles, in part, because they are not a homogeneous people, having four
official languages, with several additional strong regional dialects. A major
part of the reformation was played out in Switzerland with John Calvin in
Geneva and Huldrych Zwingli in Zurich. It was not just conflicts between
Catholics and Protestants, but also between different groups of Catholics and
several major different stripes of Protestants. There were also armed conflicts
between the rural people, who tended to be more democratic than the city folks.
It was not until the constitution of 1874 that the state authorities, rather
than church authorities, issued marriage, birth and death certificates.

The last foreign invasion of Switzerland was in 1798 by
Napoleon, and the last civil war in Switzerland was in 1847. This civil war
only resulted in somewhere between 85 and 130 people being killed — and from
that time all other disputes have been settled peacefully. During World War II,
Switzerland was totally surrounded by the Axis powers. Hitler had plans to
invade, but the Swiss were heavily armed and prepared for a long guerrilla war
— which caused the Germans to delay because they had more pressing battles.
Women only got the right to vote in 1971, and Switzerland only joined the
United Nations in 2002.

Being surrounded by countries that are jealous of its
success (i.e., many of the current members of the European Union), without much
in the way of natural resources and without access to the sea has caused the
Swiss to be much more practical and serious when it comes to public policy.
They have a national referendum system and direct democracy, where major issues
must be agreed upon by a majority of the people and a majority of the cantons,
which is slow and cumbersome but tends to mitigate against reckless policies
that are often the product of momentary passions.

The U.S. presidential election process has turned into a
circus that few would argue leads to the best qualified and sane candidate
elected president. Few know who the Swiss president is because it is not
terribly important. (It is currently a woman by the name of Simonetta
Sommaruga.)

We would have a prosperous and safe world if all countries
traded with and invested in each other’s economies; if basic human liberties,
property rights, free markets and sound currencies prevailed; if countries
ceased to meddle in the internal affairs of others; and if much of the
population was armed for the common defense in order to make it too costly for
others to invade. In other words if they all acted like Switzerland. It took
the Swiss more than 700 years of struggle to create — not a perfect role model
— but in total the best on the planet, which others can emulate only to their
benefit.

Richard W. Rahn is a senior fellow at the Cato Institute and
Chairman of the Institute for Global Economic Growth.

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